Criminal Probe Ends, but Apple CEO Still Has Hurdles
Date : 17 Jul 2008 Category : Technology
NewsFactor NetworkAlthough Jobs is not being indicted for his role in Apple's backdating of stock options grants, he will likely be called to the stand in at least two other cases. And there could be trouble over stock options at Pixar Animation Studios Inc., where Jobs was also chief executive before its buyout by Walt Disney Co. Pixar has said its former chief financial officer could face civil charges from securities regulators.
The biggest options-related issue still looming over Apple is a shareholder lawsuit filed in U.S. District Court in San Jose accusing the company and Jobs of defrauding investors with the company's backdating practices. Most shareholder lawsuits are settled out of court, but Apple could be forced to cough up millions in penalties if a jury finds it liable.
"Shareholders need to be careful with these kinds of lawsuits," said B. Espen Eckbo, founding director of the Center for Corporate Governance at the Tuck School of Business at Dartmouth College. "Part of the cost may be a very expensive reduction in the reputation of the firm -- one that goes way beyond that issue that's prompting the suit itself."
Jobs will also likely be called to testify in the Securities and Exchange Commission's civil trial of Apple's former general counsel, Nancy Heinen. That case carries less risk to Wall Street's perception of Apple than the shareholder lawsuit, but it could provide illuminating details about Jobs' role in the options scandal.
Heinen is charged with altering company records to conceal the backdating activities. Her trial is scheduled for 2009.
Apple's former chief financial officer, Fred Anderson, was also charged by the SEC. He agreed...